Just some questions and thoughts in response;

"Peaking units are units that are run at very select periods during the year, typically during the hottest days of the summer. The reason for this is that they have a very high heat rate (you can google this term) and are thus very expensive to run."

True when natural gas was 12$/thousand scf and not 5 to 6$ and when coal didnt have twice the allocated GHG emission costs of natural gas. This is old paradigm thinking that won't make Mirant money in a new carbon constrained world. Even though less efficient it might in the future be more cost-effective to run a bank of peaking and intermediate units continuously as base load units rather than a baseline coal unit.

True peaking units may not run for more than 200 hours a year but there is no technical or engineeering reason that they cant be run continuously. They may need more maintenance downtime but all are originally designed for continuous operations if need be.

So the real question is specific to each plant; say at Chalk point can the 2 intermediate dual fuel units and 5 peaking units all be run with natural gas and one of the coal baseload units be shutdown? If so how much would it cost? At avoided cost of GHG emission credits when would it become economic at 10$/ton of ghg credit or at 20$/ ton. I am sure Mirant has done the alternative analysis and they have all the information needed; we as investors just have not seen it.

Mirants own numbers say 37% of their generating capacity is already dual- fuel capable. I dont have all the details but there are probably alot of units in the intermediate sized category and not just the peaking units. I wont argue the cost of converting any of the baseload 29% of capacity that is coal only. Dont have to worry about those to make fuel switching work.

Also the permitting issues are much easier for natural gas in fact all of the dual fuel units have existing authorizations under CAA NSR and Title V operating permits to burn either fuel. Gas doesnt have the metals, particulates or SOx emissions of coal and generally does not require scrubbers for partculate control as coal does. For new units natural gas actually has a cost advantage in generally requiring less emission controls.

Bottom line there is enough here that we cant arbitrarily assume Mirant will be hurt by cap and trade as much as some of the"pundits" are making out. It would be nice to see what Mirants corporate strategy and cost estimates for compliance are. I still believe fuel switching could go fairly far and maybe be a net zero cost of compliance